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Honda Siel Cars India lowered the selling price of Honda City in India, starting on Tuesday (14/06/2011). The goal, to improve the competitiveness of this model in its segment.

For several years, the Honda City had become the top leader in its segment. But the situation began to change when a Volkswagen Vento market, Maruti SX4 Diesel and Hyundai introduced by Verna. Not to forget the Ford, also will market the Fiesta has been announced in the near future.

Conditions worsening for City was the only model that does not have a diesel variant. In fact, consumers in India consumerism liked diesel engines because of economical fuel consumption and cheaper prices. The only measures taken in order to remain competitive, the price of 66,000 rupees City lowered or Rp 12.6 million per unit.

Jnaneswar Sen, Senior Vice President, Sales & Marketing Honda Siel Cars India argue about this price drop. "Efficiency is done by maximizing local content in stages since 2009. Because already achieved economies of scale, we can reduce production costs and direct impact on consumers, "he explained.

This price decrease makes lowest variants City to 749,000 rupees (USD 142.8 million), is thin with Jazz X (top variant), 756,000 rupees (Rp144, 2 million), poses new problems, complicate the sale of Jazz. Especially if the price is not lowered. Consumers could switch to Citypa and cause the market cannibalism.

On the other hand, consumers who purchase units of Honda City with the old price (more expensive) will also complain. Price ex-AAU "second" car will fall!